How Design Fees are Determined
How Design Fees are Determined
Below are the common methods designers use to charge for their services. These vary between location and designer based on many factors, and some may use a combination of methods to serve their clients best. Understanding how designers charge for services can better help you evaluate the needs of your particular project. At Irongate Studios we use a combination model that reflects the uniqueness and complexity of each project allowing us to create the most value for our clients.
Percentage of construction cost: The designer's fee can be calculated as a percentage of the total construction cost. The percentage typically ranges from 5% to 15% but can be higher for more complex projects. For example, for a $1M project, the designer's fee may be $50,000 to $150,000 or more, depending on the percentage rate and scope of services.
Fixed fee: The designer charges a fixed fee for the entire project based on the estimated amount of time and work required. The fee can vary depending on the complexity and size of the project, as well as the designer's experience and location. For example, a designer may charge a fixed fee of $10,000 for a small residential project or $100,000 or more for a large commercial project. This method has grown in popularity and is most commonly used when the project scope is unlikely to change. One example would be a fixed fee for a conceptual home plan designed for a REI developer.
Square foot: Modern designers often charge a fee based on the project's total square footage. The fee can vary depending on the complexity and level of detail required for the design. For example, a designer may charge $10 to $20 per square foot for a simple residential project, but $50 or more per square foot for a high-end or complex project. This method allows homeowners to budget for their projects based on their own decisions regarding size and scope.
Hourly: The designer charges an hourly rate for their services, which can range from $100 to $300 or more, depending on their experience and location. The total fee will depend on the number of hours worked on the project. For example, if a designer charges $200 per hour and works 100 hours on a project, the fee would be $20,000. This is the most common method, which directly compensates the designers for production time, and eliminates conflicts of interest.